A crisis is organic—a mere byproduct of the business cycle and bad decisions.

A scandal is man-made—a scheme concocted to produce specific outcomes.

A crisis is hard to control—a natural process that must be managed as best we can.

A scandal is hard to cover-up—a game of tactics designed to hide tracks and shirk blame.

A crisis is just bad fortune.

A scandal is a criminal act.

This “Great Recession” has been a scandal from day one.

It did not happen organically, nor was it just a matter of circumstance or the business cycle. It was a well-played game of slick mortgage salesmanship, cheap money lent, bad debt sold, insurance bets hedged and the whole system played like a golden harp.

The fact that so many reaped profits by betting against the market and their clients, thus making money on both the blowing and the popping of the bubble, belies the artful framing of the financial crash as a mere “crisis.” Both Wall Street and their cozy compadres in Washington worked hard to minimize the “scandal” and play up the “crisis.” To this day, the “asset hoarding” phase of this epic scandal is widely referred to as the “Foreclosure Crisis.”

This is where we need a stiff dose of American history.

Why? Because it happened before.

The Savings and Loan Crisis (1987-1994) became a “scandal” of epic proportions, ensnaring members of Congress, dropping the country into a nagging recession and leading to a massive bailout that eerily portended the coming of the Great Recession.

Back then, the initial crisis quickly turned into a scandal as the public witnessed scenes of pensioners lined up at rapidly collapsing “thrifts” and S&L “banks” in a mad scramble to withdraw what may or may not have been left of their life savings.

In 1982, he signed the Garn-St. Germain Act, which further removed the wall separating risk-taking S&Ls and traditional banking. At the signing ceremony Reagan even remarked, “All in all, I think we’ve hit the jackpot.”

Did they ever!

It stoked a go-go building boom, bad investments and wild speculation. During Clinton and then Bush, the end of Glass-Steagall, artificially low interest rates, artificially high returns and lax enforcement improved upon that model.

In the 1980s, people poured money into Certificates of Deposits, drawn in by interest rates that seem outlandish by today’s standards. From 1981 through to the beginning of the crisis, rates even spiked to over 17%. Mostly they fluctuated between 6% and 10%. The promise of big returns gave newly deregulated institutions tons of cash to play with. Like kids rolling the dice in Monopoly, they invested it wildly—houses, office buildings and office parks. Later, financiers used the 401k frenzy, reckless mortgage lending, another go-go housing boom and a massive flood of consumerized credit to separate middle and working class folks from their wealth.

Ultimately, it all crashes. All that speculation is inherently unsustainable. They learned that during the ’80s and leveraged it in the ’00s. As the market hits the ceiling, gamblers start hedging their bets and cashing in their chips. But they know the game is rigged. Political allies quickly plan easy escapes, funding bailouts that set the scene for the real killing—taking cash on hand, or put in their hands by bailouts, to go on a spending spree, buying up the assets they initially helped to build up, but at a massive, post-crash discount.

Back then, the government sold off “toxic” assets through the Resolution Trust Corporation. Sometimes the very people who issued the risky loans at the S&Ls simply turned around and gorged themselves in the post-crash feeding frenzy, buying up those defaulted-upon buildings, office parks and even office furniture for pennies on the dollar.

This Leona Helmsley Clone Army is on the march, often populated by the very people who made the “lending mistakes” in the first place. And why not? They made the money on the upside. Cashed in their hedge bets on the downside. And then got the poor sods known collectively as “the American Taxpayer” to lend them the cash they needed to speculate and merge like mad during the hyped-up misdirection of the “crisis.”

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